Want to make more money in your business?
What’s the main reason people get inspired to leap into entrepreneurship and create their own business? You may think it’s to explore their passions and work as their own boss, and you could be right. The main reason is to make money, their own way.
It’s no surprise that individuals break into the world of freelance and startup their own companies to generate their own wealth on their own terms. With COVID-19 still among us, leaving the workforce is an unsettling or unsafe environment for many people; it’s understandable that people want to be able to maintain their quality of living, pay their bills and stay financially stable.
However, running your own business is no easy feat as start-ups face a variety of hurdles right out of the gate, such as throwing their hat in the ring that’s already filled with millions of similar hats...and some of the hats are so big that they are hogging up the ring. Starting your own business takes careful research, time and dedication to ensure that you are in the right headspace and marketspace, which determines how much money you’ll make and when!
When over 50% of small businesses fail within the first year of operation, it opens the door to question how exactly can you start making better money with your business? Where do small businesses fall short and how can they improve to scale their income, and grow their business into the lucrative dream job they’ve always wanted?
If you’re a small business owner and you’ve noticed sales have been stagnated lately, or even if you’ve considered shutting your doors, we’re here to help you turn things around and start making the money you deserve today with these three tips from our expert Financial Planners.
Step 1: Abide by these four rules of money.
Running a business has many moving parts, yet it takes only a small amount of financial savvy as you can hire bookkeepers, CPAs and Financial Planners to help you with your day-to-day and quarterly financial needs. However, you must be knowledgeable in at least the four basic rules of money to help you understand how to spend and save your money.
The 4 Basic Rules of Money
1. Know where your money is going.
If you keep good track of your daily, weekly and monthly expenses, such as how much you’re paying for materials to create your products or your employees’ salaries, you’ll be able to keep a level head on the rest of your business’s financial circumstances.
For example, if your business is hemorrhaging money in one area due to a lack of oversight, you’ll be in hot water faster than if you took the time to check your books and assign each dollar a job. Whatever is leftover from paying your overhead and operating costs can be tucked away into savings!
2. Pay yourself first.
This may sound obvious but in the frenzy that can be managing your business, there’s cash flowing to cover many necessary expenses to keep your business afloat...yet some entrepreneurs forget to pay themselves what they deserve for their hard work.
Paying yourself first is a particular spending plan that acts as a safety net to your income.
Whenever your business receives money, the first thing you should do is decide how much will be deducted as your salary, and where to put it. That could be in your retirement fund, your emergency fund or right into your checking account. Either way, before you give money to anyone or anything else, give it to yourself first.
3. Live below your means.
Where is your business spending the most money? Are those expenses absolutely required to sustain your business? Are there any other luxuries you can afford to cut out for now to save money? We understand you want only the best for your business, employees and customers, but if you’re losing money instead of making it, this could be an area to work on.
4. Avoid unnecessary debt
Whether it’s renting or buying property for your business, or taking out loans to cover huge expenses, be careful to not rack up outstanding debt as it will be a major hindrance to your income. You don’t want to give your hard earned money away to lenders, so do your best to pay down what you may owe, or steer clear of getting into debt.
Step 2: Make sure you’re in the right market.
If the first step to creating your business is honing your skill set and passions, the second step is ensuring there’s a marketspace to sell them in. Did you know that 42% of small businesses fail because there’s a lack of demand for their products and services? This is why it’s super important to understand your target market (who will purchase from you), as well as your target audience (who will emotionally connect with your business and spread the word), to guarantee your business is providing exactly what they need.
How do you find out if you’re in the right target market?
Market research.
If you don’t know the answers to the following questions, take some time out to conduct research in your industry to get to know your customers and what they want from you.
● Who are my customers? What are their typical ages, genders, locations and/or race?
● What do they buy and why? How can I create a product or service that they’ll love?
● Why should they buy from me? How can I demonstrate my quality and value over my competitors?
Step 3: Hire a trustworthy Finance Professional.
Whether you’re a brand new business, or you’ve been operating for over a year, it’s essential to have a financial expert on your team to organize your finances to prevent and manage money issues.
Even if you are generally efficient with your funds, your business requires a second pair of professional eyes to look after your taxes, payroll, investments and other critical elements to your business and personal financial goals. If you don’t trust yourself to handle the more daunting financial tasks in your business, definitely consider hiring out to get your finances in order.
You may hear the job titles “Financial Planner,” “CPA/EA/Accountant” or “bookkeeper” used interchangeably, but these are different professions with different services for your business. Here’s a brief distinction below so you can discover which would best suit your business needs.
● Financial Planners: May be certified, but is a holistic financial advisor that provide full service financial assistance with investment, taxes, retirement, personal and business planning, and more, not on a commission basis.
● CPA (Certified Public Accountant)/Enrolled Agents (EA)/Accountants: Professional financial consultants that help with accounting, taxes, auditing and other financial issues that may arise in your business.
● Bookkeepers: Usually uncertified but skilled financial clerks that record and maintain a business’s transactions through balance sheets, such as invoices, sales and account payable and receivable.
Managing a successful business demands your utmost attention, especially in the financial aspects. You started your business to be your own boss, make your own money and live the life you deserve. If that’s not happening, it’s time to review your financial situation, cut out what’s not working and start doing what will!
DELEGATE TO PROFESSIONALS YOU TRUST